Can You Depend on Legal Insurance for Your Estate Plan?

In today’s world, where the importance of affordable legal services continues to rise, individuals often consider enrolling in group legal insurance programs offered as part of their workplace benefits. These group insurance plans offer free legal assistance across various legal needs through partnerships with law firms contracted by the insurance provider.

While group legal insurance may appear to be a convenient choice for addressing your family’s legal requirements, it often falls short when it comes to creating a comprehensive estate plan that adequately safeguards your assets, your preferences, and your loved ones. In fact, estate plans, wills, or trusts obtained through legal insurance programs may lead to complications for your family.

Here are the reasons why effective estate planning for your family necessitates a personalized, counseling-based approach that goes beyond the limitations of your group legal insurance coverage. I will help you understand the potential drawbacks of relying on group legal insurance for estate planning and offer suitable alternatives to ensure your assets are well-protected, leaving a legacy of care for your loved ones instead of a tangled situation.

No One-Size-Fits-All Solution

Estate planning is a highly individualized endeavor, particularly when you have cherished family members and valuable assets to consider. While a standard estate plan generally includes at least four key documents—a will, trust, health care directive, and power of attorney—the specifics of your family dynamics and asset profile may necessitate additional planning components to ensure that your plan functions effectively when required. Furthermore, the content of these four documents must be tailored precisely to meet your family’s unique needs.

It is important to clarify that the complexity of your estate or the size of your assets is not the determining factor for customization. I have had to adapt plans for clients with seemingly typical family situations to ensure that their specific wishes were honored. Failing to customize the provisions would have resulted in unmet desires.

Each individual and family possesses distinct circumstances that demand customized planning to ensure that their plan aligns with their intentions. Your financial, medical, and personal considerations must all be factored into the creation of a comprehensive plan that not only serves you during your lifetime but also effectively passes on your assets after your passing while optimizing resource utilization.

While your group legal insurance plan may include the essential four estate planning documents, a generic set of planning documents is unlikely to fully align with your intentions and may leave your family perplexed and unprepared when faced with a real-life situation. To create a plan that truly suits you and your family, the planning process should commence with a thorough assessment of your assets and family dynamics, coupled with an education on how the law applies to your unique circumstances. This is why I refrain from adopting a one-size-fits-all approach and, instead, begin the planning journey by comprehensively examining your assets, your loved ones, and your desired outcomes.

The type of cookie-cutter estate plan typically provided through group legal insurance falls short of delivering the comprehensive considerations and counseling needed to produce a plan that effectively serves your family, prevents legal disputes, and minimizes conflicts.

Hidden Costs of Legal Insurance

Many group legal insurance plans advertise free legal services after deductibles are met, but they often conceal the limitations of the coverage offered at no extra cost. Group legal insurance typically covers certain types of legal services, including estate planning, but the resulting plan is often a basic set of documents akin to what one could generate independently online. It lacks the personalized, well-counseled approach necessary to ensure that the plan functions seamlessly when your family needs it.

Additionally, some crucial components required for creating your plan, such as notary services or document filing fees with the state, are not encompassed within the covered services and are instead billed as additional expenses.

Moreover, most legal insurance plans impose restrictions on the number of claims you can file for each service category annually. For instance, you might be limited to creating a will only once a year, with no coverage for updates to your estate plan in case of changing circumstances or the passing of a family member. Estate planning is an ongoing process that needs to adapt to life changes, asset adjustments, and evolving legal regulations. A legal insurance-covered plan may provide you with documents, but those documents are unlikely to fulfill your family’s needs when the need arises.

The Need for a Heart-Centered, Counseling-Based Approach

Estate planning transcends the mere creation of a will or trust; it involves making informed decisions about resource management throughout your life, leaving behind a legacy rather than a predicament, and shaping the best possible future for you and your loved ones.

As your dedicated Personal Family Lawyer®, I adopt a holistic approach to serving you by working closely with your family to understand your priorities, family dynamics, values, and collective aspirations. We assess all your assets, including intangible ones often overlooked in planning. Subsequently, we collaboratively design a fully customized plan that considers all aspects of your family’s well-being in the short and long term.

Furthermore, the needs of both you and your family will evolve over time. New assets will be acquired, and others may be sold. Family dynamics will change, whether through the birth of a child, the transition to grandparenthood, or other life events. To ensure your wishes are honored and your assets are protected, regardless of shifting circumstances, it is crucial to align your estate plan with your loved ones’ situations.

My planning process involves creating an inventory of all your assets, and I offer a complimentary review of your entire plan, including your decisions and asset inventory, every three years. This ensures that the plan we crafted for you remains effective and adaptable to your evolving needs.

Shortcomings of Legal Insurance in Long-Term Planning

Estate planning is a lifelong journey, and as your financial situation, needs, and desires change over time, your estate plan must adapt accordingly. Solely relying on group legal insurance may not provide the ongoing support and guidance required to address changing circumstances in the years ahead.

Under group legal insurance, your choice of attorneys is restricted to firms with contracts with the insurance provider, and there is no assurance that the attorney who assists you this year will be available for plan adjustments in the future. Family dynamics will also evolve as your children grow into adults, necessitating updates to your estate plan to designate permanent guardians or powers of attorney.

You may wish to devise a strategy to protect your daughter’s inheritance in the event of her marriage’s longevity concerns. We address these and other considerations as part of our ongoing planning with you.

In cases where swift changes to your plan are required due to unexpected emergencies or family deaths, relying on an attorney through group legal insurance may be impractical. It is preferable to work with an attorney who is familiar with your family’s story and can seamlessly pick up where you left off, allowing for prompt and effective adjustments to your plan with a simple phone call.

Trusted Expertise in Estate Planning

While group legal insurance may appear to offer comprehensive protection for your family’s legal needs and financial interests, the services provided through these plans often fall short of ensuring you and your family receive the necessary support and guidance.

Instead, it is essential to collaborate with an experienced estate planning attorney who takes the time to understand your family’s unique circumstances and can guide you through every step of the process.

Your estate planning journey merits personalized attention, compassionate understanding, and unwavering commitment. This is why I have dedicated my practice to a form of estate planning known as Life & Legacy Planning, which enables me to expertly guide you through decision-making while proactively addressing future issues.

If you want to make sure your loved ones are always cared for no matter what the future holds, schedule a phone call with me and I’ll share all the details of our Family Wealth Planning Session, which kicks off our Life & Legacy Planning process. Call (916) 801-8995 or email to schedule an appointment. 

amanda vavak, owner of your property law firm, rocklin estate planning and family law

Schedule a free consultation with your property law firm

Schedule a free consultation with Amanda Vavak, Chief Legal Counsel, Your Property Law Firm.